Effect on Drug Utilization and Expenditures of a Cost-Share Change From Copayment to Coinsurance

BACKGROUND: While increases in prescription drug spending have moderated in recent years, drug spending is still a concern among managed care organizations and health plan administrators. In order to minimize cost increases from year to year, many health care plans have shifted more of the cost of medications to the member-consumer. Coinsurance, a benefit design in which the patient pays a percentage of the cost of the medication, is garnering more attention as a type of cost-sharing that differs from the traditional copayment model. OBJECTIVES: To estimate the impact on medication expenditures and utilization of a pharmacy benefit design change from 3-tier copayment to coinsurance. METHODS: Drug expenditures and utilization of beneficiaries aged e18 years and continuously enrolled in 2 privately insured groups were compared before and after a benefit design change in 1 of the groups. For the 12 months before the benefit design change, both groups had a 3-tier, fixed-dollar copayment structure with identical cost-sharing per 30-day supply: $10 tier-1 copayment for generic drugs, $25 tier-2 copayment for preferred brand drugs, and $40 tier-3 copayment for non-preferred brand drugs. On September 1, 2005, a 4-tier coinsurance benefit design (25% for all tiers except tier-3 [non-preferred] drugs at 50%, with minimum and maximum patient out-of-pocket [OOP] cost applied to each tier) was implemented in the intervention group (N=46,311). The 3-tier copayment design was maintained in the comparison group (N=7,916). A difference in- difference analysis was used to estimate the effect of the benefit design change on expenditures and utilization, overall (for all prescription drugs), and for 3 classes of essential medications: antihypertensives, antidepressants, and statins. Analyses measured changes in outcomes from 6 months pre-change (October 1, 2004, through March 31, 2005) through 6 months post-change (October 1, 2005, through March 31, 2006). In the overall (all drug) analyses, per member per month (PMPM) outcome measures were total pharmacy claims and cost, beneficiary (patient OOP) cost, and employer (plan sponsor) cost. Analyses of the 3 essential drug classes were limited to members with at least 1 claim in the drug class in both the pre-change and post-change periods (N=11,917, intervention group; 1,792, comparison group), and assessed per patient per month (PPPM) days supply, beneficiary cost, employer cost, and total cost. RESULTS: Beneficiaries in the intervention group paid 31.8% of total pharmacy benefit cost at the point of care versus 31.5% in the comparison group in the post-change period. The increases in beneficiary cost from the pre-change period to the post-change period were not significantly different for the intervention (7.5%) and comparison (3.0%) groups (P=0.983). From the pre-change period to the post-change period, total spending per member increased $4.57 PMPM (6.3%), from $72.29 to $76.87 in the intervention group versus a $5.87 PMPM increase (9.5%), from $61.54 to $67.41, in the comparison group, a relative difference of $1.30 PMPM (P=0.013). The increases in utilization from the pre-change period to the post-change period were not significantly different in the intervention group (2.4%) versus the comparison group (4.6%, P=0.189). Utilization per patient in the 3 essential drug classes increased 4.1% (1.59 days PPPM) in the intervention group versus 9.0% (3.23 days PPPM) in the comparison group (P=0.004). Total expenditures in the 3 classes for the intervention and comparison groups increased 8.2% ($5.07 PPPM) and 13.3% ($7.80 PPPM), respectively, a difference of $2.73 PPPM (P=0.003). Beneficiary cost for all 3 drug classes increased $2.20 PPPM (9.2%) in the intervention group versus $2.12 PPPM (9.1%) in the comparison group (P=0.032). The increases in employer cost for the 3 essential drug classes in the intervention group (7.5%, $2.86 PPPM) and comparison group (16.1%, $5.67 PPPM) did not significantly differ (P=0.057). CONCLUSIONS: A pharmacy benefit design change from tiered copayment to tiered coinsurance, without a significant increase in beneficiary OOP costs, was associated with a lower rate of increase in total pharmacy benefit cost and no significant reduction in utilization. For utilizers in 3 essential drug classes, drug utilization and total spending increased in the coinsurance group but at a lower rate of increase compared with the copayment group. The coinsurance design provides another approach for controlling prescription utilization and spending for certain medication classes.

CONCLUSIONS:Apharmacybenefit design changefromtiered copayment to tiered coinsurance,withoutasignificant increase in beneficiary OOP costs,was associated with alower rate o fincrease in total pharmacy benefitcostand no significantreduction in utilization.For utilizers in 3essential drug classes,drugutilization and totalspending increasedin thecoinsurance group butatalower rate of increase compared with the copaymentgroup.The coinsurance design provides anotherapproach for controlling prescriptionutilization and spendingfor certainmedication classes.
•P reviousresearchonthe effect of coinsurancehas yieldedmixed resultsa nd has been limited to only af ew services ands elect populations; e.g.,e lderly,l ower income,o rp atientsf or whom out-of-pocketc ost wasv eryl ow before coinsurancei mplementation. •T he effect on prescription drug utilization of changing from a tiered copaymenttoatieredcoinsurance structure has notbeen examined.
To date,nostudies have examined theeffect of changing from at iered copaymentd esignt oatiered coinsuranced esign. With little evidence on theeffect thatthistypeofchangewill have on patientb ehavior andc osts, we examined such ad esignc hange andi ts effectso ne xpendituresa nd utilization.B yu sing ac omparisong roup to adjust foru tilization andc ost trends in ap lan with ac opayment design,t hiss tudy wasa blet oe stimatet he impact of thebenefit design change on medication utilization and expenditures.Utilization wasanalyzedbothoverall (for alltherapeutic classesc ombined) andf or 3c hronic medicationc lasses: antihypertensives,antidepressants,and statins.
To be included in thep resent study, beneficiaries hadt ob e continuously enrolled fort he entire 19-month studyp eriod (12m onthsbeforethe plan change and7m onthsafter thep lan change)a nd be ≥ 18 years of agea tt he beginningo ft he study period.All beneficiaries meetingthe continuous enrollmentc riteriaw erei ncludedi na nalyseso fo verall (all drugs) utilization andcost.Tobeincludedinthe analyses of the3essentialmedication classes( antihypertensives, antidepressants,a nd statins),a n PharmacyB enefit Designs

StatisticalAnalysis
Fort he statisticala nalyseso fu tilization andc ost, two 6-monthc ohortsw erec onstructed fort he intervention and Tier Placemento fM e dications Changes in utilization and expenditures between the prechange and post-change periods for both groups were calculated. A difference-in-difference (DD) analysis was utilized to determine the difference in the change (pre-to post-) between the intervention and comparison groups. The DD analysis is the most appropriate measure of the effect of the design change because it controls for the utilization (expenditure) changes that would have occurred over time and also for differences between the intervention and comparison groups in utilization. The Wilcoxon rank sum test (also known as the Mann-Whitney U test) was used to analyze the difference in the change between the 2 groups.
Two-tailed t tests were used to determine the significance in difference in age between the 2 groups and χ 2 analyses were used to calculate the difference in gender between the 2 groups and the participation rates for the 3 medication classes included in this study. The Wilcoxon rank sum test was used to analyze the difference in Chronic Disease Scores 34 between the 2 groups. The significance level for all statistical analyses was set at P ≤ 0.05. All cohorts were grouped and statistical analyses were conducted with SAS Version 8.0 (SAS Institute Inc., Cary, NC).

Overall Utilization
A total of 46,311 and 7,916 members aged ≥ 18 years were continuously enrolled during the study period in the intervention and comparison groups, respectively. Changes in PMPM utilization and cost for the 2 groups are presented in Table 3. In the post-change period, intervention group beneficiaries paid 31.8% of total prescription drug cost versus 31.5% for comparison group beneficiaries. The increases in beneficiary cost from the pre-change to the post-change period were not significantly different for the intervention (7.5%) and comparison (3.0%) groups (P = 0.983). From the pre-change to the post-change period, total spending per member increased $4.57 PMPM (6.3%), from $72.29 to $76.87, in the intervention group versus a $5.87 PMPM increase (9.5%), from $61.54 to $67.41, in the comparison group, a relative difference of $1.30 PMPM (P = 0.013). The increases in utilization from the pre-change to the post-change period were not significantly different in the intervention group (2.4%) versus the comparison group (4.6%, P = 0.189).

Participation Rates for 3 Essential Drug Classes
Of the 46,311 and 7,916 study members in the intervention and comparison groups, respectively, 13,870 (29.9% of the intervention group) and 2,126 (26.9% of the comparison group) filled at least 1 prescription for a medication in 1 of the 3 study drug classes in the pre-change period. For all 3 classes, participation was higher in the intervention group than in the comparison group in both the pre-change and post-change periods (Table 4). Participation rates increased slightly from the pre-change to the post-change period in both groups. While the increases were slightly greater in the comparison group than in the intervention group for all 3 classes, the differences in the change amounts were not statistically significant.

Utilizers of 3 Essential Drug Classes
A total of 11,917 members in the intervention group and 1,792 members in the comparison group filled at least 1 prescription for at least 1 of the 3 essential medication classes in both the pre-change and post-change periods. Among users of the 3 essential medication classes, the intervention group was significantly older and sicker than the comparison group. Except in the antidepressant class, the intervention group had a significantly higher percentage of women filling prescriptions than did the comparison group (Table 5). While these differences are statistically significant due to the large sample  Participation Rates* Effect on Drug Utilization and Expenditures of a Cost-Share Change From Copayment to Coinsurance size, they are probably not practically or clinically significant. Women were generally the predominant gender in all drug classes in both the intervention and comparison groups with the exception of the statins drug class, where more than half the patients were men. Table 6a shows utilization and expenditures for patients in the 2 study groups in the pre-change and post-change periods. Total PPPM days supply summed across the 3 drug classes increased from the pre-change to the post-change period for both the intervention and comparison groups, from 38.99 to 40.58 (4.1%) for the intervention group and from 35.78 to 39.01 (9.0%) for the comparison group. The change amount was slightly smaller for the intervention group (1.59 days PPPM) than for the comparison group (3.23 days PPPM, P = 0.004). From the pre-change to the post-change period, mean PPPM OOP spending increased by $2.20 and $2.12 for the intervention and comparison groups, respectively, a difference of $0.08 per month (P = 0.032). The increases in employer cost in the intervention group (7.5%, $2.86 PPPM) and comparison group (16.1%, $5.67 PPPM) did not significantly differ (P = 0.057). The PPPM changes in the total cost of prescription drugs were $5.07 (8.2%) and $7.80 (13.3%) in the intervention and comparison groups, respectively, a difference of $2.73 PPPM (P = 0.003). The 2 groups did not significantly differ with respect to change in utilization of tier-1 or tier-2 drugs. For tier-3 drugs, utilization remained essentially constant from the pre-change to the post-change period in the intervention group (change of 0.09 days PPPM) but increased slightly in the comparison group (change of 0.43 days PPPM, P = 0.002).
From the pre-change to the post-change period, patient OOP cost for tier-1 medications decreased by $0.85 PPPM in the intervention group and increased by $0.43 PPPM in the comparison group (P < 0.001). The decrease in patient OOP for the intervention group was offset by an increase in the employer group's expenditures. The increase in employer group expenditures of $1.33 PPPM in the intervention group was significantly higher than the $0.29 increase observed in the comparison group (P < 0.001). As a result, the intervention and comparison groups did not significantly differ with respect to change in total spending on tier-1 medications.
With respect to patient OOP spending, results for tier-2 medications were the opposite of the tier-1 results. PPPM OOP spending increased $0.27 more in the intervention group than in the comparison group (P < 0.001), while PPPM employer group spending increased by $1.43 less in the intervention group than in the comparison group (P = 0.017). As with the tier-1 medications, the 2 study groups did not significantly differ with respect to change in total tier-2 cost (P = 0.150).
PPPM OOP expenditures on tier-3 medications increased by $1.09 more in the intervention group than in the comparison group (P < 0.001). Employer group spending on tier-3 medications decreased by $0.77 PPPM in the intervention group while it increased by $1.65 PPPM in the comparison group (P < 0.001).
As a result, overall spending on tier-3 medications increased by $1.33 more PPPM in the comparison group than in the intervention group.

Medication Class Utilization and Expenditures
Tables 6b-6d show the differences in utilization and expenditures for the 3 classes of medications. Overall utilization increased in both study groups for the 3 classes evaluated. The increase in utilization was significantly less for the intervention group than for the comparison group in each class. No significant differences in total utilization or cost for tier-1 or tier-2 medications were observed in any class; only utilization of tier-3 antihypertensives (P = 0.031) and tier-3 statins (P = 0.029) differed significantly from the comparison group.
The effect of the benefit change on OOP spending varied depending on class and tier. Overall OOP expenditure increased $1.54 PPPM less in the intervention group than in the comparison group for antihypertensives (P < 0.001), while it increased $1.90 more in the intervention group than in the comparison group for statins (P < 0.001). For tier-1 antihypertensives and SSRIs/ SNRIs, OOP spending in the intervention group decreased by $1.32 PPPM and $0.07 PPPM, respectively, from the pre-change period to the post-change period. Conversely, OOP spending for tier-3 medications increased significantly more in the intervention group than in the comparison group for all 3 classes.
Thec oinsurance design implemented during this study maintained thetier system usedinthe typical3-tierc opayment structuref or most drug classes. Thee xception,a sd iscussed previously,i st hata ll biologic medications were movedt oa4 th copaymentt ier.Asw ould be expected forabenefit change that shiftsmorecost to thepatient,the employer groupexpenditures were favorably affected whilet he patiente xperienced as lightly greaterincreaseinOOP spending.
It is possible that switching behavior forpatientstakingtier-2 andtier-3medications is influenceddirectly by thecost-share of medications thatt heya re currentlyt aking. Patient OOPs pendingf or tier-3 medicationsi ncreased more fort he intervention groupthanfor thecomparison group, whichmay have stabilized utilization in thei nterventiong roup.T he stable utilization of tier-3 medications in thei nterventiong roup compares favorably with thesmall growth in utilization observed in thecomparison group. It is likelythatthe previous 3-tier copaymentdesignhad alreadycausedareductioninthe use of tier-3 medications.One mayalsoexpect thatf ollowing an increase in patientOOP,p lan participants maychoosetodiscontinue use of thosemedications or file claimsw itha nother insurancec arrier if onei sa vailable within theirf amily. Ther ates of discontinuation in filling prescriptions in both groups afterthe intervention date were similar in thata pproximately equal proportionso fp atientsw ithp reperiod utilization were excluded forl acko fp ost-periodu tilization (Figure).
Thes tatin medications demonstrated thel argest increase in patiente xpendituresd ue in part to thel acko fw idelyu sed Effect on Drug Utilization andExpenditur es of a Cost-ShareChange From CopaymenttoCoinsurance genericm edications at thetimeo fthis study. Overall utilization of statin medications didnot increase as much in theintervention groupasinthe comparison group. This is consistent with previousestimates by Gibson et al., whof ound thatc ontinuing users of chronicm edications arei nsensitive to pricei nr espondingt o copaymenti ncreases. 5 However, Landsman et al.o bservedt hat followingimplementationofachangefroma2-tierto3-tier benefit,the statin discontinuation rate washigherinthe groupthat changedbenefitsthaninac omparison group. 8 Thediscrepancy betweenLandsmane ta l.'s findingsa nd ourr esults mayb ed ue to differences incost-sharing amounts; Landsman et al.'ssample likelye xperienced larger averagec ost-sharing change thand id oursampled ue to them uchlargeru tilization forf ormulary statinsi no ur plans. As more statinsb ecomea vailable generically andt hose generics become less expensive, it is likelyt hatt he effect of ac oinsurance design implementation will be similart o that seen with thea ntihypertensivem edications in thep resent study.
Thecopayment to coinsurancebenefit design change explored in this studydid help containthe rise in medication cost trend. Thec oinsurance modelw iths trategicallya ligned minimums may provide an added incentive to use less expensive generic medications, as patient expenditures for tier-1 medications may decrease after the benefit design change. Coinsurance provides an option to employer groups and insurers interested in controlling medication spending without decreasing utilization.